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Donkeys and Lions led by Lyons

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56March/April 2022GRADUATE RESEARCH students are often told of a drunk who has lost his keys elsewhere but insists on searching for them under a street lamp “because that’s where the light is”. It is a warning of the danger of relying on data merely because they are available rather than because they address a research question. More formally termed “convenience sampling”, data gathered by this methodology, unlike random sampling, are treated with caution because of difculty in applying the results generally.For this reason, academic research papers publish a prominent statement of the limitations of the scope and application of their methodology. Acknowledge–ments of any such limitations are conspicuously lacking in the coverage of reports of Irish property markets published by the two leading property web–sites, Daft and MyHome. Nor, for that matter, do such considerations prevent politicians waving these reports at each other across the Dáil chamber as con–clusive proof of their arguments. Admittedly, it is difcult to explain nuance and com–plexity. But that is precisely the job of experts, and all the more so when they have chosen to put themselves forward as a public commentator. Too many of the con–tributions to our debate on housing are either blithely, or wilfully, ignorant of just exactly what is being meas–ured in the reports that are so readily quoted. In some instances, the reports themselves do little to correct these misconceptions. What qualifcations J Vivian CookeDaft:the solution to the housing crisis depends on facts-led public-policy but we need to be discriminating about the facts we choose and who chooses them, even when it’s Ronan Lyons Daft Reports whose “statistics are based on properties advertised on Daft.ie for a given period” all too readily confate the observations of its sample with the overall national situationand explanations are to be found skulk at the very back of the reports in the small print.Daft Reports whose “statistics are based on proper–ties advertised on Daft.ie for a given period” all too readily confate the observations of its sample with the overall national situation. And they do so with a shocking casualness that would not be accepted in peer-reviewed academic publications. Just one of the many examples of this tendency is the commentary in its Q4 2021 Rental Report, which refers to “712 ads for rental homes in Dublin”, but, in the report’s headline, this becomes “712: The number of available rental homes in Dublin”. And, in the Irish Times: “Daft.ie’s rental price report for the fnal quarter of 2021 shows there were just 712 properties available in Dublin, the lowest level since its records began in 2006”. This was inac–curate and the Irish Timeswas far from alone in misrepresenting it.What the Daft property fgures measure is not a crisis in supply available to rent, but – to be entirely accurate – a crisis in the number of adverts on its web–site. While Daft could be, indeed most likely is, experiencing a cashfow squeeze due to underlying market shortage in property supply, such a conclusion is suggested but not proven by their own data. Property website reports are unable to overcome problems generated because they do not capture transactions that are:• Not advertised on their website (!);• Actual prices paid as distinct from the initial prices advertised (also !);MEDIADonkeys and lions led by Lyons
March/April 2022 57• The rents paid by people in existing tenancies;• Of-market transactions;• Self builds;• Institutional activity.This fawed methodology also explains the discrepancy between Daft’s fnding that “(T)he number of available rental homes in Ireland is 1,397” in Q3 of 2021 rental market, and record–ing by the Residential Tenancy Board of 15,711 new tenancies in the same period. While the data underlying both statistics are true, they present very diferent pictures from each other. Diferences in research design and methodol–ogy inevitable leads to diferences in fndings. The Department of Finance’s comparisons of property reports from diferent sources show sig–nifcant variations in their results. The magnitude of their diferences precludes the possibility that all of them are accurate. suggested technical refnements to the Council’s predictive model, PII were satisfed with a call for an “independent review of the HNDA and supply targets to ensure that Dublin can achieve its full potential”. Both submissions were true to their authors’ track records and concluded that DCC should remove existing restrictions on the con–struction of build-to-rent projects. Supply and Demand is an important analytical construct, but it has its limitations. Most notably, it only holds true when all other things are equal; yet all other things never remain constant. This is a point that Lyons made in these pages back in the November 2014 issue: “Everything else being equal. . . [U]nfortunately, everything is not equal”. The information generated from a simplifed model of supply and demand can inform a coun–terfactual situation: that is what prices would have been for a diferent quantum of supply. Which, although interesting of itself, only pro–vides a necessary but insufcient frst step to explain price movements. Accurate, real-world observations of the property market require more methodological sophistication that, among other things, account for intervening variables and con–trol for diferences within a sample population.For instance, in addition to other limitations, the author qualifes the Daft Report fndings by highlighting how market trends have changed due to the increase in the proportion of longer terms tenancies – ie 4-year tenancies. It is difcult to see how the Daft Rental Report controls for this factor as the flter on its website only provides for tenancy terms as far as 3 years. Even then, the 6 properties nationally returned by this flter as available for a minimum tenancy term of 3 years, put the minimum term as 1 year + in the text of their adverts. If the Daft Rent report only uses observations from its own listings, then it is fail–ing to account properly for what its author admits Supply and Demand is an important analytical construct, but it only holds true when all other things are equal; yet all other things never remain constant; and his policy prescriptions are strong on supply measures but neglect the demand sideThe author of the Daft Reports is Ronan Lyons. He has acknowledged on his personal website the need for a “stayer rental index” in addition to a “movers’ rental index”. This would capture infor–mation from renters who renew the leases for their current accommodation without their landlord advertising on Daft. Unfortunately, it is not possi–ble, three years after these comments, to see if the methodology for Daft Reports has been amended, as the link provided on the website which prom–ises these important details does not work.These important methodological faws are brushed over and do nothing to prevent Daft from claiming that its rental price report “has become the defnitive barometer of the Irish rental market”. A claim that is disputed by the Depart–ment of Finance in whose opinion “[T]he RTB rent index is the most comprehensive source of rent prices in Ireland” (ibid). Daft’s coyness over its methodology is at odds with 24 pages of rigorous and detailed criticism of Dublin City Council’s methodology for calculat–ing future housing demand made by Lyons in his personal submission to the Draft Dublin City Development Plan 2022 –2028. Of the 2,824 sub–missions made to the Draft Plan, VillageMagazine has, so far (and admitting that the review of the material is not defnitive), identifed only one other submission that challenged the accuracy of DCC’s Housing Need and Demand Assessment: the submission made by Property Industry Ire–land (PII). The industry body’s view that the tool, (pro–vided to local authorities by the Department of Housing Local Government and Heritage), “seri–ously underestimate(s) the currently unmet demand in the city” was echoed in the opinion of the Trinity economist that the model had resulted in a “signifcant understatement of housing need, particular for renting households”. Where Lyons (Tables taken from Dept of Finance “Housing and Property Sector Chartpack”, December 2021)
58March/April 2022is an important change in the rental market.The value of statistical modelling is not in validating the uncontested truism of the laws of supply and demand, but in informing policy makers and the public about the complexity of the solutions to the housing crisis. While careful reading of academic publications and the various property reports does reveal the intrica–cies of some of the research design used, public commentary, even among the same authors, soon dis–solves into the defense of intellectual positions against armies of straw men. Public housing policy can no more be decided by rely–ing purely on the laws of supply and demand than one would design an airplane by relying solely on Newton’s laws of motion.Both property websites have a commercial interest in exaggerating the signifcance of the fndings of their quarterly reports. These reports act as both a marketing tool that drive clicks on their websites and, also, in sus–taining the model of substituting the private provision of housing in the place public housing on which their businesses are built. Or, as Lyons put it: “(T)he Daft Report is integral to the branding of daft.ie in the mar–ketplace and has become one of the most widely cited economic reports in the country. Each Daft Report is fea–tured in over 50 print articles, reaching a readership of over 1 million people, with a similar audience reach through broadcast”. It must be as personally gratifying as it is profession–ally rewarding for everyone to be mentioned so prominently in the morning news headlines.The authors of these private reports beneft from exclusive access to datas that are not readily available to other researchers in their feld. The fawning coverage of these reports enhances their professional reputations and increases the commercial value of Davy Stockbro–kers, (authors of the MyHome.ie repots) investor briefngs or, in the case of Ronan Lyons, the price corpo–rate clients are willing to pay for his speaking events Lyons has yet to meet a housing crisis that couldn’t be solved by building more buy-to-rent blocks. In this, he reveals a happy coincidence between his professional interests and the intellectual dogma that colours his analysis. He is quick to cite the Law of Supply and Demand in public debate, but his policy prescriptions are strong on supply measures but neglect the demand side of that elementary equation. He never satisfactorily explains why additional demand from the increased construction he proposes does not translate into higher construction cost-infation in a market where supply of qualifed and skilled labour is tightly constrained, even though he places a heavy weight on the explanatory power of this factor cost in his calculations).His commentary easily moves from quantitative research to personal judgement; a bias that has a pecu–liar prejudice against owner-occupiers. For example he tweeted in May 2021: “everyone seems to have forgot–ten renters, who are lower-income, in the scramble to look after homeowners” And that “Voter-owner-occupi–ers are far more likely the bad guys here”. And he is prejudiced against the suggestion that local authorities could build social housing. He tweeted in August 2020:“But I would much rather an AHB-only approach, rather than LA-driven”.Meanwhile, institutional landlords are enthusiasti–cally encouraged because they shift the market into providing more rental accommodation instead of owner-occupier homes. All institutional landlords are welcomed, even if they are buying up residential units that are already completed instead of funding new con–struction that genuinely increases supply because he is “extremely pessimistic that they can successfully design rules that stop one without afecting the other”. (Twitter 7 May 2021) Though this failure might be remedied if Irish Institutional Property were to commission Lyons to conduct a report on this topic rather one that supple–ments his existing reports for them that seeks to establish the need for more buy-to-rent accommodation.The reliability of the fgures in any body of research requires meticulous scrutiny. But recent media reports showed that fgures used by Ronan Lyons to calculate construction costs in Ireland were furnished to him by construction industry representative bodies and con–tested by other experts. It casts doubt.All these considerations are important, not because they invalidate any fndings, but because they put those fndings in context.Indeed, Lyons’ painstaking and granular academic research is a valuable contribution to dispelling the anecdotal comments that unhelpfully pass as accepted facts. For instance, he has debunked the myth that the Capital Dock Development remains 90% unlet. Though even here his fnding on this topic suggest further research is required to distinguish between the “active lets” he focuses on and actually occupned units. It is odd who we allow to defne the national conversa–tion: institutions who have a direct fnancial interest in the private property market – construction industry rep–resentative bodies and property advertisers -provide data to selected economists who apply their narrow per–spective on the mechanistic operations of the market but whose expertise does not extend to the full range of policy issues. This research is then avidly reported in the media, the print sector of which is dependent for a large proportion of its income on the same estate agents paying to advertise in its property supplements for the same properties that Daft and MyHome used to gener–ate the original data. This assortment of gatekeepers to the public debate on the housing crisis acts to exclude other experts and consideration of anything beyond price fuctuations. Public policy must address both the abstract and the concrete sides of the housing market, yet the commen–tary undervalues inter-disciplinary insights by experts such as Orla Hegarty Assistant Professor in School of Architecture Planning and Environmental Policy, UCD and Dr Lorcan Sirr, Senior Lecturer at the School of Survey and Construction Management, TUD. What is unhelpful is when economists turn attempts to expand the conversation into false disagreements with “No, but” responses when “Yes, and” would be more helpful.The solution to the housing crisis will only come about with facts-led public-policy but we need to be more dis–criminating about what facts we choose and perhaps who chooses them. Figures used by Ronan Lyons to calculate construction costs in Ireland were furnished to him by construction industry representative bodies and contested by other experts

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